Oil Market Avoids Crisis Despite US-Iran Conflict

The ongoing US-Iran conflict has caused one of the largest oil supply disruptions in history, but crude prices have only seen a limited increase. The situation raises concerns about the potential for a more severe oil shock if the conflict persists.

The International Energy Agency (IEA) responded to the disruptions by releasing 400 million barrels of oil from member reserves, marking the largest coordinated release in history.

China has reduced its oil imports by 30-35% since the onset of the conflict, helping to mitigate the demand-supply imbalance. However, China may prioritize its own energy security over supporting global markets if the crisis continues.